Is Transcription a Technical or Professional Component?

Q: When reporting radiology services, are transcription services considered to be included in the technical component (TC) or the professional component (PC)?

A: When defining professional and technical components for radiology services, the Centers for Medicare & Medicaid Services (CMS) stipulates:

The PC of a service is for physician work interpreting a diagnostic test or performing a procedure, and includes indirect practice and malpractice expenses related to that work. Modifier 26 is used with the billing code to indicate that the PC is being billed.

The TC is for all non-physician work, and includes administrative, personnel and capital (equipment and facility) costs, and related malpractice expenses. Modifier TC is used with the billing code to indicate that the TC is being billed.

CMS’ definition does not clarify whether transcription services constitute “indirect practice and malpractice expenses” (PC) or “administrative, personnel and capital (equipment and facility) costs” (TC). The American College of Radiology (ACR), however, explicitly says that transcription is a technical cost:

Transcription costs for radiology and radiation oncology services are reimbursed under the technical component and are never included in the professional component. The professional component for radiology services paid under the Medicare Physicians Fee Schedule (MPFS) is not intended to cover transcription costs.

In addition, transcription costs are not included in the physician work valuation process. The professional component represents the physician’s professional services associated with their interpretation (via hand written or dictation etc.) and not transcription itself. Transcribing a report or transcription from a Dictaphone is typically performed by administrative staff and not part of the physician interpretation/work.

John Verhovshek, MA, CPC, is Managing Editor at AAPC. He has covered medical coding and billing, healthcare policy, and the business of medicine since 1999. He is an alumnus of York College of Pennsylvania and Clemson University, and a member of the Asheville-Hendersonville AAPC Local Chapter.

John Verhovshek, MA, CPC, is Managing Editor at AAPC. He has covered medical coding and billing, healthcare policy, and the business of medicine since 1999. He is an alumnus of York College of Pennsylvania and Clemson University, and a member of the Asheville-Hendersonville AAPC Local Chapter.